Except for cedar, most sawlog prices are in the tank. As most folks are well aware, low housing starts and mortgage credit issues have beaten down lumber values to levels not seen for more than 20 years, but cedar lumber and log prices have run against-the-grain, with markets holding at historically high levels.
The main reason for cedar’s continually strong price seems to relate to supply-side economics. A large percentage of cedar lumber used in the U.S. comes from British Columbia, but the weakened U.S. dollar has resulted in an increased price for Canadian cedar in U.S. markets. Also, Canadian sawmill strikes last year choked the cedar lumber supply, so, as Tim Cochran, a writer for Random Lengths, states: “The strikes hurt the supply chain and it has been hard to catch up.”
Prices and management of other species are also impacting cedar. For example, cedar rarely grows in pure stands and is usually a minor species component of most forests. Consequently, less cedar is being harvested because log prices for other species are low. Even the one species that competes with cedar for market share – redwood – has seen harvest decline, thus creating less market competition for cedar.
On the demand side, cedar continues to enjoy a relatively strong position in specialty markets. For example, construction of more expensive, high-end custom homes, which use more cedar products, seem to be more insulated from the impact of current economic conditions. Also, cedar is often used in remodel projects, which continue to move forward despite the housing slow down.
Future cedar markets are a popular topic of conservation. Many predicted a drop in cedar log prices long before now, but prices have held. It does appear likely that future cedar prices are more inclined to fall, so it seems best to harvest cedar sooner rather than later.
Money Going, Going, Gone?
Money and time is running out in Idaho for Forest Stewardship Plan cost-share funding. This funding pays up to 75% of the cost of developing a stewardship plan and has been a key incentive encouraging landowners to actively manage their forests. Additionally, having a plan in place makes a forest owner eligible for other cost-share benefits, such as tree planting or thinning.
Given the uncertain future of this funding, if you have not had a plan developed for your property, please contact IFM for more information before the funding disappears